Retailer Superdry (OTCPK:SEPGY) spent much of 2018 struggling. And now the company has fallen further into the red with annual reporting a loss of £85.4 million ($106.77 million USD). Further, the company is warning investors that revenues will likely fall further as it executes changes to “reset” the brand.
Superdry Stock Falls
The company announced its delayed results for the year to April 27 and said that it made a “statutory pretax loss of £85.4m ($106.77m).”
The loss is especially significant considering the company pulled in a profit of £65.3 million in the 2017–18 year. Revenue flatlined at £872 million.
The company blamed a “poor performance” in the second half for dragging on revenue, but all-in-all, store sales were down 4%.
Further, it said, “the non-cash onerous lease and impairment charges of £129.5m booked in its accounts reflected decreasing store revenues and its cautious recovery plan.”
According to news outlets:
“Superdry’s underlying pretax profit slumped 57% to £41.9m—at the bottom of the range of analysts’ forecasts that have been cut after a string of warnings.”
Superdry Stock Tanks
Superdry shares have tanked 66% over the last year. At present, shares are selling for £4.39 on the London Stock Exchange, down roughly 2% on the news.
The fashion retailer had issued three profit warnings in the run-up to its report. Fueled by lagging sales, a bitter dispute at head office between management and co-founder Julian Dunkerton also hasn’t helped. A disagreement over Superdry’s direction resulted in a shareholder vote that saw Dunkerton return to the company in April. The executive leadership team then quit in response.
Dunkerton remains interim chief executive at present. He has warned that his revival plans for Superdry could take up to two years and aims to restore a “design-led” culture.
It is likely that SDRY stock will flounder in the coming weeks if not months. The retail climate is now notoriously difficult for brick and mortar stores, and Superdry is still running on a very old business model that will take years to turn around.
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